Okay, check this out ---
Two topics here - 1 being SOL which I'll get to in a minute. The first thing is Martin Pring. Who's heard of him? He's a legend in technical analysis. Well, here's what he says ---
The downside objective of the DOW is the low 8000's. However, NOT on this current decline. We 'should' get a big bounce possibly here to retest the highs of DOW 12700ish first. Double top and then that's all she wrote.
He's basically saying that later this year will be the beginning of (or continuation of - depending on your point of view) the current secular bear market which will be the final leg down. And it's THAT low you want to mortgage your house to buy and hold for the next 20 year bull market.
Okay, okay. Now that goes completely against nearly ALL consensus in the market if you watch CNBC on a regular basis. But we know thier track record. So, do with that what you will. So, again, it's bottom around here, rally into summer a tad to retest - or just go flat in a tight range, break down in the fall on lower GDP, then collapse 2012 into DOW 8000s, then buy at the end of next year.
As for SOL: let me just tell you what a gift you have here. The stock currently trades for near cash and even the gloomiest forcast calls for nearly $1.50 in EPS. If you pull up all the chinese solars, YGE, JASO, LDK, SOL, TSL, etc, they all have the same chart - a waterfall. To me that spells of a large fund or funds selling out without regard. Because most of these stocks have such low floats, a single large seller or two selling a basket of stocks within a sector they want out of can do this.
Now look at the opportunity presented -- for $195, you can buy 1 Jan $4 2012 call option that controls $525 worth of stock. Multiply that by 10 and you get less than $2k controlling over $5k of stock that gives you 7 months to just see your stock run over $5.95 before you make money.
Do you think SOL, based on all the fundamental reasons we've talked about, will trade in the next 7 months to say, $7? If so, then you'll see that $2k turn into $3k, or a 50% return. At $8, you double your money.
We all know who've been following it that the main and pretty much only reason for the decline in revs for all the companies has been the subsidy cuts in Germany and Italy. So, there is currently and temporarily an inventory glut leading to lower ASPs. But it's only temporary. That sets up for earning's suprises later this year.
So, I'd be a big buyer of those calls and then let the market run, watch it then fall with a TZA position, then wait to see TNA fall hopefully under $50 again. If so, we start averaging into TNA.
AI
